How Chinese Gangs Made $1B From Scam Texts

Criminal organizations based in China have stolen more than $1 billion from Americans over the past three years through massive text-message scams, according to the Department of Homeland Security (DHS).

The fraudulent messages, which often appear to come from toll agencies or postal services, trick victims into believing they owe small fees. When people click the links and enter their credit card details, scammers use that information to buy iPhones, gift cards, and other goods, or launder the money through digital wallets and gig workers in the United States, The Wall Street Journal reports.

The scale of the problem has exploded. In a single day last month, Americans reported a record 330,000 fake toll-payment texts, and DHS officials say the total volume of scam messages has tripled since early this year.

At the heart of the scheme is a shadow network of “SIM farms”—rooms filled with hundreds of mobile devices sending thousands of texts at once. These operations are hidden in plain sight, often located in shared office spaces across Houston, Los Angeles, Miami, and other U.S. cities.

The fraud typically begins with a phishing text that leads victims to a fake payment portal designed to steal financial data. What’s made the scams even more difficult to stop is a new tactic: criminals install stolen credit card numbers into Apple Wallet and Google Wallet accounts in Asia, then remotely share them with U.S.-based buyers.

This method allows criminals to bypass multi-factor authentication, enabling tap-to-pay purchases that look legitimate to banks. Gig workers—often recruited on apps such as WeChat—are paid small commissions to help facilitate transactions or use the stolen data to make purchases. Some are reportedly paid as little as 12 cents for every $100 gift card they buy.

The goods are resold in China, funneling profits back into organized crime. While law enforcement has begun making arrests—one Chinese national recently pleaded guilty to using more than 100 stolen cards to buy gift cards in Kentucky—officials warn that the fraud networks are growing faster than they can be dismantled.

President Trump’s administration has vowed to increase cooperation between federal agencies and the private sector to combat these transnational digital crimes.

Original Source